Hope for a Breakthrough in the Supply Chain Management System

Impressive business growth, coupled with continuous technology development makes Amazon one of the mecca of innovation in the sector E-commerce. Adapting the company's latest data, business growth from 2018 to 2019 has reached 30%. Meanwhile, 13% of the profits come from global transactions, including in the Asia Pacific region.

In more detail, many things can be learned from the success of the company led by Jeff Bezos. Supply chain management (supply chain management) for one thing, enabling Amazon to accommodate customer expectations regarding fast delivery of goods. One of the realizations in features "same day delivery".

Today a similar concept is massively applied by players E-commerce all over the world, including Indonesia. A major transformation was carried out to enable the distribution of goods to be more efficient. For some deliveries to big cities, especially the Jabodetabek area, platforms such as Tokopedia, Shopee, Bukalapak and so on have allowed one day delivery, take advantage of collaboration with ride-sharing applications.

Why is the supply chain an important aspect?

Supply chain process (supply chains) has changed from time to time. In the era before E-commerce, the process only involves shoppers and shop owners, because transactions occur directly on the spot. In the era of buying and selling online, the activities are getting longer. In every aspect of the supply chain, there are various information exchange activities, fund transactions, goods management, logistics management, and reporting processes.

Strategic partnerships with third parties are used as solutions so that the flow is efficient. Each company with its competence carries out management in their respective fields. For example, platforms E-commerce focus on providing channels, logistics companies concentrate on product distribution and supply chain companies provide warehouses.

At this point in time, service fragmentation E-commerce instead presents a new problem. With the same expectations about fast delivery, logistics systems often stumble in the face of overwhelming order traction. This routinely happens on special occasions, such as shopping day celebrations or approaching holidays.

Don't want to give up on the situation, some companies e-commercee started to build infrastructure independently. Like what Tokopedia has done through its vision to become "Infrastructure as a Service" in the retail sector. They build fulfillment services (full film)Branch Store to expedite the product distribution process.

Tokopedia Head of Fulfillment Erwin Dwi Saputra to DailySocial tell how it works. "Toko Branch allows sellers to store product stock in Tokopedia warehouses in various regions, especially in areas where product demand tends to be high. With efficient fulfillment services, sellers now no longer need to consider operational issues of order fulfillment, especially when the seller's business is starting to grow rapidly."

Furthermore, the delivery of these goods is managed by 12 logistics partners who have collaborated with Tokopedia. Besides being faster, it allows companies to provide more affordable shipping costs. Tokopedia calls this feature "instant delivery".

In its initial phase, TokoBranch service is available in Jakarta, Bandung and Surabaya, then it will continue to grow to reach all corners of Indonesia in the future.

Another innovation in logistics

Other companies also echo the vision of strengthening logistics. JD.id is one of them, said President & CEO Zhang Li, their current priority is seeking service "same day delivery", starting from the entire Greater Jakarta area. The service in question allows orders to be sent to customers on the same day if the order is placed before 10.00 WIB.

Zhang claims that 85% of orders in Jabodetabek have used same-day delivery. This figure is also a driving force for strengthening logistics infrastructure, because currently speed is a superior service. For expansion, his party has built 11 warehouses spread across various cities, including Medan, Makassar, Surabaya, Semarang and Pontianak.

The practice is more complex than in other countries, even for the JD.id logistics platform which was first applied in its home country of China. Indonesia geographically has an archipelago of islands. At a minimum, logistics are accommodated with two modes of transportation, land-sea or land-air to cross, whichever is more efficient in terms of load, time and cost.

Seeing these conditions, the General Chair of the Indonesian E-Commerce Association (idEA) Ignatius Untung said that data-based management was important. According to him, at one point all companies needed a more comprehensive approach. end-to-end to maximize consumer needs. Supply chain management is also still the focus of discussion among association members.

The data-based approach is indeed an important reference. In terms of logistics, the system needs the right algorithm to produce an analysis of an efficient distribution path. Including to determine the warehouse points to accommodate the product.

Bukalapak takes a different approach. While refining the infrastructure, they are trying to improve delivery effectiveness by presenting an integrated platform. They realize that the logistics business in Indonesia is currently very large, especially when talking about players at the regional level. There are logistics businesses that specialize in sending large cargoes, between islands by sea to logistics businesses that reach remote areas.

Fitur OpenDelivery focus on helping sales partners manage the shipping process. Logistic partners are placed in one integrated channel, including offering pick-up services so that orders can be processed as quickly as possible. Again, the priority is to meet consumer demands in order to get the desired goods in a fast time.

Need a supply chain management breakthrough

Giant E-commerce such as Amazon, Alibaba or JD.com started releasing logistics tools taking advantage of technological advances. Call it the delivery of goods by drone (drones) or a car without a driver (driverless cars). Its mission is to bring automation to the distribution process. Even in their warehouses, the help of "robotic arms" has also been applied for more careful management of goods.

With the existing conditions in Indonesia, from the perspective of public infrastructure and socio-economic order, local players are also constantly required to present themselves new breakthrough in the logistics sector. There is great hope for 2020 and in the years to come that the retail business distribution chain system in the country will improve.